Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $0.7M (vs $1.1M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $405K | $405K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $390K | $11K | $401K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $62K | $184K | $246K | $777K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $13K | $13K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 84.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $101K | $203K | $304K | $405K | $405K | $405K | $405K |
| Denial Rate Reduction | $0 | $100K | $201K | $301K | $401K | $401K | $401K | $401K |
| A/R Days Reduction | $0 | $82K | $164K | $246K | $246K | $246K | $246K | $246K |
| Clean Claim Rate | $0 | $6K | $13K | $13K | $13K | $13K | $13K | $13K |
| Cumulative | $0 | $290K | $580K | $864K | $1.1M | $1.1M | $1.1M | $1.1M |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $1.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 89% / 23.8x | 93% / 26.8x | 97% / 29.8x | 99% / 31.3x | 101% / 32.8x |
| 9.0x | 84% / 20.8x | 88% / 23.5x | 92% / 26.2x | 94% / 27.5x | 96% / 28.8x |
| 10.0x | 79% / 18.4x | 84% / 20.8x | 88% / 23.2x | 89% / 24.4x | 91% / 25.6x |
| 11.0x | 75% / 16.4x | 79% / 18.6x | 84% / 20.8x | 85% / 21.9x | 87% / 23.0x |
| 12.0x | 71% / 14.8x | 76% / 16.8x | 80% / 18.8x | 82% / 19.8x | 84% / 20.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 63% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.4x, adding 6.1 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $419K | — | $419K | 2.1% |
| Year 1 | $432K | +$710K | $1.1M | 5.6% |
| Year 2 | $445K | +$1.1M | $1.5M | 7.5% |
| Year 3 | $458K | +$1.1M | $1.5M | 7.5% |
| Year 4 | $472K | +$1.1M | $1.5M | 7.6% |
| Year 5 | $486K | +$1.1M | $1.6M | 7.7% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Cost to Collect | $203K | $304K | $405K | $486K |
| Denial Rate Reductio | $201K | $301K | $401K | $481K |
| A/R Days Reduction | $123K | $185K | $246K | $296K |
| Clean Claim Rate | $6K | $10K | $13K | $16K |
| Total | $533K | $799K | $1.1M | $1.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 102 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.1% | -31.3% | -20.8% | -13.0% | P93 |
| Net-to-Gross | 52.2% | 51.3% | 61.9% | 84.0% | P26 |
| Occupancy | 40.2% | 18.1% | 26.3% | 40.0% | P75 |
| Rev/Bed | $1.3M | $455K | $679K | $1.2M | P75 |
| Exp/Bed | $1.2M | $573K | $919K | $1.3M | P71 |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.